Schmit, Todd M.; Luo, Jianchuan; Tauer, Loren W. - Charles H. Dyson School of Applied Economics and … - 2008
A real option analysis of dry-grind corn ethanol plants compared to a standard net present value analysis (NPV) shows that the option values increase entry prices and lower exit prices of investment and disinvestment considerably. For a large plant, the gross margin of ethanol price over the...